Blue Shield Sues Internist In $1.3-million Fraud Case

October 02, 1985|The Morning Call

Pennsylvania Blue Shield filed a civil suit this week against Dr. John D. Kristofic, an Allegheny County internist, alleging fraud.

Blue Shield's suit, filed in the U.S. District Court in Harrisburg, alleges that Kristofic falsified claims submitted to Blue Shield and received payment for testsand services that were either inappropriate or never performed.

Blue Shield has paid Kristofic more than $1.8 million since 1980. About $1.3 million of that amount will be under scrutiny for possible refund to Blue Shield.

Blue Shield routinely conducts computerized statistical analyses of doctors' practices to determine any unusual patterns of ordering tests and services. It was such an analysis that first identified Blue Shield's payments to Kristofic as varying from the norm.

During 1983, Blue Shield was notified that the Federal Bureau of Investigation also was beginning to look at Kristofic's practice. Blue Shield's policy is to cooperate completely with any government authorities who may be investigating claims submitted to the company.

In its complaint, Blue Shield alleges that Kristofic has filed fraudulent claims for services he never performed and has violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO). Under RICO, a victimized business may sue for three times its actual damages, plus attorney's fees.

According to Frank J. Ryan, vice president of corporate and public affairs for Pennsylvania Blue Shield, "We're going to use the court process to examine every piece of evidence available to us. We plan to recover every dollar of our subscribers' money that Dr. Kristofic may have received for tests or services that were inappropriate or not performed."

According to documents filed with the commonwealth of Pennsylvania, Kristofic's license to practice medicine was suspended July 24 by the state Board of Medical Education and Licensure. The board filed charges alleging that Kristofic posed "a clear and immediate danger" to the community. On Aug. 21, the licensure board restored Kristofic's license with restrictions for a period not to exceed 180 days, pending the outcome of a formal hearing.

"Since Kristofic is once again practicing medicine, he is eligible to submit claims to Pennsylvania Blue Shield," Ryan said. "Blue Shield will be examining all of Dr. Kristofic's claims very carefully."

In 1984, Blue Shield's fraud investigations activities resulted in three convictions, with more than $293,000 in damages paid to the company.

So far in 1985, the company has had more than $100,000 returned to it as a result of its fraud investigations. Since 1970, more than 60 health care providers have been convicted of fraud against Pennsylvania Blue Shield or Medicare. Pennsylvania Blue Shield is the federal government's Medicare Part B carrier for Pennsylvania, Delaware and the District of Columbia metropolitan area.

Pennsylvania Blue Shield is the largest Blue Shield plan in the nation. In 1984, Blue Shield paid out more than $2.3 billion in claims. The company serves 6 million private business subscribers in Pennsylvania and more than 2 million Medicare beneficiaries.